Arbitral Awards & Labour Court Judgements issued prior to 2019 may be registered and executed in USD After all. A review of CFI Holdings t/a Farm & City v Machaya SC 37/2023

“The request by the appellants for the court a quo to determine the issue of the currency was in essence a request for the court to determine the lawfulness or correctness of the decision of the Labour Court. The court a quo did not have the power to determine the propriety of the judgment of the Labour Court. To do so would amount to delving into the merits of the matter before the Labour Court. The court a quo could only do so in the exercise of its review or appeal powers.”

Introduction

The dispute between Farm & City and Andrew Machaya under the Supreme Court case number SC 37 / 2023 involved an appeal against the registration of a Labour Court judgement amounting to USD 177,408.00 in favour of the Respondent. The significance of this judgement is that awards and judgements, that were issued before 2019, may be registered and executed in USD provided certain conditions are present. This is significant because the conventional understanding is that every judgment before 2019 February must be payable and executed in ZWL at the rate of 1 USD: 1ZWL. This judgement, if religiously followed, will result in the protection of several employees who are sitting on unregistered and unexecuted arbitral awards and Labour Court judgements issued before 2019.

Facts

In 2003 the respondent was suspended by the appellant. He was its Personnel Manager. In 2012 the Supreme Court nullified the suspension leading to his retirement. He was fully paid his wages and benefits thereafter. This was all paid in USD. The respondent then applied to the Labour Court for quantification of the outstanding dues. He was awarded USD 177,408.00. He then proceeded to apply to the HC for the registration of the Labour Court judgement for enforcement. This was in terms of section 93B(3) of the Labour Act (Chapter 28.01).

At the High Court and in the registration proceedings, the appellant employer argued that the judgement ought to have been in ZWL given the Finance Act (Number 2) of 2019. It then argued that because the judgement was in USD it was not sounding in money and therefore not registrable. The HC argued that delving into the propriety of the proper currency would be taking an appellate role which was not acceptable. The High Court also argued that the respondent had correctly canvassed and proved the requirements for the registration of the LC judgment. It then registered the LC judgement leaving the appellant company not amused.

The court’s findings and the law

Before the SC was a question as to whether the requirements for the registration of the LC judgment had been fulfilled.

Requirements for the registration of an award

The court ruled that the five requirements that had to be fulfilled to register an award are as follows:

“The requirements that must be satisfied before the High Court or the Magistrates Court grants an application for registration of an award are:

  1. The award must have been granted by a competent arbitrator.
  2. The award must sound in money.
  3. The award is still extant and has not been set aside on review or appeal.
  4. The litigants are the parties to the award. The award must be certified as an award of the arbitrator.”

The court observed that even though these requirements applied to an arbitral award, with equal force they also applied to the registration of LC judgements.[1] Regarding the question as to whether the judgement was sounding in money, it was observed by the SC that such a question had not been brought to the fore in the court aquo and could thus not be raised for the first time in the SC.

    The question of law raised in the court a quo

    It was the SC’s observation that during the proceedings aquo, the Appellant argued that the issue of currency ought to be considered by the HC.  The SC pointed out that had the HC acceded to this request it would have acted beyond its powers. It observed:

    “The limitation of the court a quo’s powers was addressed in the remarks cited above from Vasco Olympio, supra, and Biltrans (Pvt) Ltd v Minister of Public Service, Labour, and Social Welfare & Ors, supra, where it was clearly pronounced that the court a quo would not have the power to delve into the merits of the case in an application for the registration of an award and in this case a Labour Court judgment. All that the court a quo was required to do was to determine whether the requirements for registration of the judgment had been met.”

    The HC was therefore not in a position to go into the merits of the case before it and decide on the issue of the correct currency. The court also noted that the appellant had not done anything to challenge the currency issue since its leave to appeal had been abandoned at the LC. This had left the LC judgement extant with no possibility that it would be turned around.

      Conclusion of the dispute

      The appeal was dismissed with costs for lack of merit.

      Own comment

      The significance of this case is huge. It puts employees in a position where if one has an award or a judgment that was quantified in USD before February 2019, such a judgment can be registered provided the employer has not challenged the same. Presented with such an application a Magistrate Court or a High Court cannot pay attention to the arguments related to the 2019 currency changes because doing so would amount to reviewing the award being registered. The HC or MC only register Labour Court judgements. The two courts cannot delve into the merits of the matter. This judgement is commendable for its stance towards the protection of employees. It resonates very well with the theory of labour law, which seeks to balance the unequal power between employers and employees.


      [1]              CFI Holdings t/a Farm & City v Machaya SC 37 / 2023 on page 6.

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